Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin improved compared to the same quarter last year but weakened sequentially from the prior quarter. Revenue was stable relative to last year and slightly higher than the preceding quarter.
- Operating cash flow exceeded capital expenditure, generating positive free cash flow. The free cash flow margin was lower than the prior quarter but higher than the same quarter a year earlier.
- Compared to the prior quarter, operating cash flow and free cash flow both declined, leading to a weakened free cash flow margin. Compared to the same quarter last year, operating cash flow and free cash flow were higher, and capital expenditure was lower, resulting in an improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$976.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$237.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$292.3M
Cash generated by operations before capital spending.
CapEx
$54.6M
Capital spending and related asset purchases.
FCF margin
15.0%
The share of revenue converted into free cash flow.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $292.3M | Cash generated by operations before capital spending. |
| Capital expenditures | $54.6M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $237.7M | Operating cash flow less capital spending. |
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-06-30 | $1.3B | $157.6M | $23.2M | $134.4M | 10.1% |
| 2022-09-30 | $1.3B | $223.7M | $59.3M | $164.4M | 12.5% |
| 2022-12-31 | $1.4B | $351.1M | $80.7M | $270.4M | 18.8% |
| 2023-03-31 | $1.4B | $273.1M | $25.0M | $248.1M | 17.4% |
| 2023-06-30 | $1.5B | $236.1M | $38.2M | $197.9M | 13.6% |
| 2023-09-30 | $1.5B | $285.9M | $58.3M | $227.6M | 15.6% |
| 2023-12-31 | $1.5B | $235.5M | $102.0M | $133.5M | 8.7% |
| 2024-03-31 | $1.5B | $263.0M | $46.3M | $216.7M | 14.4% |
| 2024-06-30 | $1.5B | $236.9M | $30.3M | $206.6M | 13.7% |
| 2024-09-30 | $1.5B | $364.0M | $48.6M | $315.4M | 20.9% |
| 2024-12-31 | $1.6B | $292.3M | $54.6M | $237.7M | 15.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 125.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-Year Cash Conversion Improvement
Compared to the same quarter last year, operating cash flow was higher and capital expenditure was lower, driving a higher free cash flow and a stronger free cash flow margin.
This led to a consolidated free cash flow margin that was higher than the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure, generating positive free cash flow. The free cash flow margin was lower than the prior quarter but higher than the same quarter a year earlier.
Compared to the prior quarter, operating cash flow and free cash flow both declined, leading to a weakened free cash flow margin. Compared to the same quarter last year, operating cash flow and free cash flow were higher, and capital expenditure was lower, resulting in an improved margin.
Track the trajectory of operating cash flow, which declined from the prior quarter after being higher year-over-year.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |